Says at <a rel="nofollow" target="_blank" href="
https://budgeting.thenest.com/can-deduct-surrender-charge-annuity-32815.html:">https://budgeting.the...> "The gain or loss on a surrendered non-qualified annuity is equal to the surrender amount minus the cost basis. The surrender amount is the annuity’s cash value minus the surrender charge. The cost basis is the amount you contributed by way of premiums. Gains are taxed as ordinary income, not capital gains. Losses are also ordinary. Report your loss in Part II of Internal Revenue Service Form 4797. You can use the loss on the surrender of a non-qualified annuity to offset ordinary income..."
